Saturday, December 9, 2017

In my last post, I mentioned some events and trends
that suggest philanthropic and civic activity is slowly entering the mainstream
of Chinese society. These are trends that some of us may not want to recognize
but we ignore them at our peril. Whether we like it or not, Chinese (and here I
mean citizens and non-governmental actors and not just the government) are
driving social change. Below are two more trends we should be keeping an eye
on.

One is the growing interest of Chinese individuals
in giving as evidenced in the rapid rise of online fundraising. In 2016, the Ministry of Civil Affairs
approved 13 charitable organizations’ online philanthropy platforms. Among
them, the Tencent Philanthropy (腾讯公益平台), Ant Group Philanthropy (蚂蚁金服公益平台) and Taobao Philanthropy (淘宝公益平台) platforms raised 1.289 billion
RMB, 37.79% higher than the figure for 2015. Looking at the age groups of the
donors, the generation born in the 80s ranked first, making up more than 45% of
the donors. Online donations went mostly to education and health, followed by
disaster relief and environmental protection. More than 70% of online donations
were via mobile phones.

One event that has stimulated a great deal of
public interest in philanthropy is Tencent’s 9/9 (September 9th) Day
of Giving which began in 2015. This year’s 9/9 Day of Giving (which actually
takes place over three days) was the most successful so far, generating over
1.3 billion RMB in donations, of which 829.9 million RMB came from public
donations, 299.99 million RMB came from matching funds from the Tencent
Foundation, and 177 million RMB from social enterprises.A total of 12. 68 million donors made
contributions to around 6,466 charitable projects.

While the results of the 9/9 Day of Giving are
impressive, concerns about fraud have cropped up with reports about a small
number of donations being machine-generated. Tencent Foundation has promised to
investigate the issue and issue the results soon.

The second trend is
the internationalization of Chinese philanthtropy. Over the last few years,
largely following the outflow of Chinese investment, Chinese foundations have
begun to fund and even set up their own charitable and CSR activities in
Southeast Asia, Africa and even Europe, sometimes leveraging the expertise and
experience of international NGOs. Until now, however, there has been little
connection between Chinese foundation activities abroad and global development
goals such as the UN Sustainable Development Goals (SDGs). That was the aim of a recent report, “Philanthropy for the
SDGs in China,” jointly released by the United Nations Development Program
(UNDP) and China Foundation Center (CFC) which are jointly setting up a
knowledge sharing platform to mobilize Chinese philanthropic actors to link
their activities more closely to the SDGs. One contribution of the report was
to call attention to the current imbalances in Chinese philanthropy which has
poured funding into education and poverty alleviation, yet neglected areas such
as gender equality, sanitation, clean energy and climate change.

As with online
fundraising, the internationalization of Chinese philanthropy is going through growing
pains. While some Chinese philanthropists and foundations have started to make
donations and set up projects overseas, they have done so warily, sensitive to
public backlash against Chinese resources being used to support development
abroad rather than development at home. One of the first studies of Chinese
NGOs internationalizing found that while over half of the NGOs surveyed felt it
was necessary to internationalize, only about 17% felt the current environment
was right while about 46% felt the environment for internationalization was not
sufficiently developed[i]. Still there is no doubt
that internationalization is taking off and will gather steam following China’s
growing footprint overseas and initiatives like One Belt One Road. The same study found that the value of
overseas donations from Chinese foundations in 2015 had risen by a factor of 3.66
since 2014 and 1209 since 2008.

Tuesday, December 5, 2017

I’ve been informed that today is International
Volunteers Day and the start of International Civil Society Week, with a
gathering of civil society people in Fiji of all places. Fiji sounds like a
nice place to be at this time of year. Not that you have to go there to be
reminded that civil society exists. All you need to do is walk out your front
door and find a gathering of people. Ask them what they’re doing and why. More
likely than not, they’re getting together for some civic-minded purpose.

At any rate, since this is Civil Society Week, I
feel I should write something about philanthropy and civil society in China.
I’ve been planning to write something about Xi Jinping’s 19th Party
Congress report and its implications for philanthropy and civil society in
China, but will return to that weighty subject when I have more time to wrap my
head around it.

Speaking about Xi’s report, a number of informed, sober-minded
commentators gave some pretty optimistic appraisals about it after the Congress
was over, particularly Xi’s recognition of the role that social forces and
organizations play in China’s governance. They may have a point. Xi is making his pronouncements at a time when a number of initiatives and trends are taking place
that suggest philanthropic and civic activity are slowly entering the
mainstream of Chinese society. It may not always take forms that we in the West
recognize, but the changes are happening more quickly than many would think.
The 2016 Charity Law had a major role to play in stimulating these changes,
some of which are reflected in the following events and trends that took place
over the last few months.

In early September, almost exactly one year after the Charity Law went
into effect, the Ministry of Civil Affairs launched
the National Charity Information Platform (全国慈善信息公开平台) in early September. The purpose of the platform is to make it easier
for the public to find information about charitable organizations and supervise
their activities, and encourage charitable organizations to disclose
information about their fundraising and activities. The platform currently has
information about 2,134 charitable organizations and 38 charitable trusts which
were made possible by the Charity Law. The official website of the information
platform is http://cishan.chinanpo.gov.cn.
The platform can also be accessed by visiting the Ministry of Civil Affairs’
website at www.mca.gov.cn or China’s
NPO website at www.chinanpo.gov.cn,
and clicking on “Charity Information Platform” box at the bottom of the
website.

A
recent report released by the China Charity Alliance, “Giving China: The Annual
Report on Philanthropy,” shows clear evidence of significant growth

in philanthropy in Chinese society
last year. According to the report, total donations in 2016 reached a new
historic high to 139.294 billion RMB, a 25.65% increase over 2015 (100.859
billion RMB). Per capita giving was 100.74 RMB, a 23.32% increase over 2015
(81.69 RMB).

Unlike the U.S. where individual giving
dominates, corporate giving in China continues to account for the lion’s share
with 65.35% of total donations in 2016. However, individual donations are
rising faster, increasing by 73.52%, compared to corporate donations which grew
by 15.86%.

Social donations are heavily concentrated in
three areas: education (30.44%), health (26.05%) and poverty alleviation
(21.01%). Social donations primarily went to foundations (62.55 billion RMB)
and the China Charity Federation system (40.41 billion RMB), although a fair
share still went to government departments, public institutions and mass
organizations (26.06 billion RMB).

Comparatively speaking, China still lags behind
the U.S. and European countries such as the UK. Total donations accounted for
0.19% of China’s GDP, compared to 2.1% for the U.S. and 0.52% for the UK.
However, if the growth in giving continues at the current pace, we can expect
China to close the gap significantly over the next few decades.

I’ll discuss two other trends – the rapid rise
of online fundraising and the internationalization of philanthropy - in my next
blogpost, hopefully before Civil Society Week is over.

Saturday, October 28, 2017

With the closing of the 19th
Party Congress, some have been quick to label this period the “Xi era”, and it’s
easy to see why. Centralization of power, consolidation of strongman rule,
bolstering national security and rule of law, rejuvenating the Chinese
Communist Party, and extending China’s global influence – these are all hallmarks of XJP’s rule, and
they are impressive. But we may be too quick in anointing this the “Xi era”
simply because it is too early to know whether Xi’s policies will find
broad-based support and make a lasting impact beyond his tenure.

Certainly the policies of Mao and Deng had
such an impact, and their names are worthy of pinning “era” next to their names.
But we should remember that five and even 10 years into the “Deng era,” it was
by no means clear whether Deng’s reform policies would survive, particularly
when confronted with the 1989 democracy protests. Now, five years into the “Xi
era,” we know that he has centralized the policy making process and cemented
his strongman status. But it is by no means clear that Xi’s particular approach
to consolidating power has created a more stable and robust national security
and rule of law regime, or rejuvenated the CCP, let alone put China on the socioeconomic
path to achieving a moderately prosperous, and more equitable, society.

Looking back at the threats confronting CCP
rule when Xi came to power, it is hard to fault him for centralizing power in
Beijing and himself, because he attributed those threats to the fragmentation
and decentralization of power in the CCP in the years preceding his tenure.
Centralizing power, which went hand in hand with strengthening Xi’s own
authority, was critical if Xi was to formulate quick responses to what he
perceived as unbridled corruption and lax discipline within the party, and
security threats inside and outside China’s periphery.

But the course that Xi chose came fraught
with its own pitfalls. One is that this
concentration of power, which was intended as the means to an end could easily become an end unto itself. In this scenario,
Xi’s effort to strengthen the “rule of law” and rejuvenate the CCP ends up
becoming the “rule of Xi” and destabilizing the party and the rule of law as institutions, as David Shambaugh and others remind us. This risk
would become a reality if Xi were to go against party norms and keep leaders
who have reached “retirement age” such as Wang Qishan in the Politburo Standing
Committee (which Xi did not do), or staying on as General Secretary of the CCP
for a third term. If so, then Xi would
be guilty of committing the biggest irony of all: by seeking to rejuvenate the
CCP, he would be undermining efforts made by Deng Xiaoping and his successors
to strengthen CCP rule by strengthening collective leadership and leadership succession
norms.

Even if Xi were not to go that far, his
approach to politics and governance still runs the risk of not being sustainable
because it may be unable to garner broad support. Unlike Deng Xiaoping’s rural
and fiscal reforms which played to farmers and provincial leaders, Xi’s
centralizing policies, particularly his anti-corruption campaign, have not had
a galvanizing effect on local leaders or any other key constituency. In this
sense, XJP’s governance approach has been more about building up his own
personal authority and the authority of the Party than about cultivating
support from key constituencies.

The big question then is whether Xi’s governance
measures will outlive him when he steps down, either according to form in 2022
at the 20th Party Congress after serving his second five-year term,
or by breaking form and serving a third term and then stepping down in 2027 at
the 21st Party Congress.

This brings me to the crucial contribution
of civil society to stable and legitimate governance. As others have pointed
out, the concentration of power in central bodies and Xi, without feedback mechanisms
from different segments of society, raises grave risks in a country as large
and diverse as China. As China’s successful rural and private sector reforms of
the 1980s and 1990s show, effective and sustainable policies require input and
buy-in from local authorities and social actors who are unlikely to feel a
strong sense of ownership over policies that are not beneficial to their lives.
In direct contrast, disastrous policy
experiments such as the Great Leap Forward and Cultural Revolution were the
result of an overconcentration of power and inadequate feedback from the
grassroots.

At an earlier point in time, Xi seemed to
understand the importance of consulting with civil society in improving China’s
governance. In the 2013 Third Plenum Decision of the 18th Central
Committee on Comprehensively Deepening the Reforms, which was extolled at the
time as being Xi’s signature statement and is now seen by many commentators as
destined for the garbage bin, Xi recognized the significance of working with social
actors in strengthening governance. Entire sections of the Decision discussed
the importance of “consultative democracy” and “social governance.”

We will, under the Party's
leadership, carry out extensive consultations on major issues relating to economic and social development as well
as specific problems involving the people's immediate interests, and conduct
consultations before and during the implementation of policy decisions. We will
build a consultative democracy featuring appropriate procedures and complete
segments to expand the consultation channels of the organs of state power,
committees of the Chinese People's Political Consultative Conference, political
parties, and community-level and social organizations. We will conduct
intensive consultations on issues relating to legislation, administration,
democracy, political participation and social problems.

The section on “innovations in social
governance” called for clarifying the rights and interests of social
organizations and working with them to create mechanisms to prevent and resolve
social conflicts.The language here was
still state-centered, emphasizing the role of party leadership and adhering to
the law, but the call for reinvigorating horizontal interactions between the
state and society, rather than strengthening the state’s vertical management of
society, was notable, unprecedented and yes even innovative.

Four years after the Third Plenum Decision,
it is clear that Xi has turned his back on his own prescription for better
governance, and instead condoned tightening controls over social actors, and silencing
those who advocate for socioeconomic changes. There have been a few exceptions.
The revised
Environmental Protection Law which went into effect on January 1, 2015
allowed social organizations for the first time to file public interest
lawsuits against polluters. In November 2015, facing historically high levels
of labor disputes and strikes, Xi also took the official trade union, the
All-China Federation of Trade Unions (ACFTU), to task for becoming irrelevant
to workers and called on them to reform to better represent workers. But these
measures have been too few and more
symbolic than substantive.

The tragedy of these last few years is that
the voices that have been muzzled were not calling for revolution,
instigating violence, or fomenting social disorder. They were instead constructive
voices calling for practical, innovative ways to address official corruption,
unpaid wages and social insurance, sexual harassment, pollution, and
discrimination against ethnic minorities. The people calling for these changes
were doing so out of a sense of responsibility to the nation, because they
wanted to make China a more inclusive, equitable and just place very much in
the socialist spirit. They were in fact the very voices that could help Xi
craft better policies if he had listened to them and incorporated their ideas
into his policies.

The challenges Xi and his new leadership
team face after the 19th Party Congress are immense as Xi himself acknowledges.
If he continues his current governance approach, he runs the very substantial
risk of undermining the long-term capacity of the Party to govern by vesting so
much power and authority in himself. Or
he could use his immense power wisely and return to his original playbook of
social governance, reaching out to social constituencies to give them a voice
in shaping socioeconomic policies, thereby creating broad-based support that
would strengthen their legitimacy and sustainability.

Monday, September 25, 2017

After a slow start, the Ministry of Public Security (MPS) and its provincial
Public Security Bureaus (PSBs) seem to be finding their stride in implementing the Overseas NGO Law
with the rate of registering representative offices and filing “temporary
activities” quickening over the last few months. As of August 22, the MPS
Overseas NGO Office website shows a total of 185 representative offices, of
which around 88 (48%) were registered just in the last three months.The representative offices were registered in
around 20 of China’s 32 provincial-level units, with the highest number
concentrated in Beijing, Shanghai, Yunnan and Guangdong. Because some NGOs have
registered more than one representative office, the actual number of foreign
NGOs that have registered in China is somewhat lower than 185. Most of these
NGOs are from Hong Kong, the U.S., Japan, Germany and South Korea, and fall
into two main groups: 1) NGOs and foundations working on development issues
such as education, health, disaster relief, poverty alleviation and
environment; and 2) business and trade associations. For the latest data and tables, see ChinaFile's terrific China NGO project.

The progress made in the last few months also shows that the MPS authorities
have made some headway in getting PSUs to agree to sponsor foreign NGOs
interested in registering a representative office. Finding a willing PSU has
been a major stumbling block to registration in the past. NGOs such as the
Nature Conservancy, Ford Foundation, Asia Foundation, Give2Asia, Environmental
Defense Fund, and the Heinrich Boll Foundation, to mention some prominent
examples, had been unable to register under the 2004 Foundation Management
Regulations in large part because they were unable to find a willing PSU. Over
the last few months, all of these NGOs have found a willing PSU and
successfully registered. In some of the more challenging cases in which the NGO
worked in multiple issue sectors, the MPS was able to bring in new PSUs that had not been on the original PSU directory to sponsor these NGOs.
The most notable of these is the Chinese People’s
Association for Friendship with Foreign Countries (CPAFFC) which is serving as
the PSU for the Ford, Asia, Heinrich Boll, Konrad Adenauer and Rosa Luxemburg
Foundations, as well as Give2Asia[i].

The MPS website also shows that foreign NGOs filed
for 228 “temporary activities” with the large majority of these being filed in
the last 4-5 months. Here again, some NGOs have filed for multiple temporary
activities (Oxfam Hong Kong alone has filed for more than 30) so the actual
number of NGOs that have filed successfully is well below 228. Most of these
activities are being filed in the western and southern provinces of Sichuan,
Guizhou, Guangdong and Yunnan followed by Shaanxi, Beijing, Gansu and Anhui.
The NGOs filing these activities mostly come from Hong Kong, the U.S. and
Germany. In contrast to NGO representative offices, which have been in both the
trade/business and development sectors, the large majority of NGOs filing
temporary activities work on development issues concentrated on youth, education,
poverty alleviation, health, disaster relief, capacity building, environment,
and disabilities.

There is of course still a great deal of work ahead for both the MPS and overseas NGOs. While the numbers of NGOs that have registered rep offices and filed "temporary activities" may look promising, they are far less than the actual number of overseas NGOs working in China which official sources estimate at around 7000. Given the amount of time required for MPS and provincial PSBs to create the infrastructure, coordinate with other relevant departments, and train staff, it should not be all that surprising that only a few hundred NGOs have succeeded. Finding willing PSUs remains a problem as only a handful of the eligible PSUs are sponsoring overseas NGOs. On the NGO side, some are in the process of preparing their paperwork, but an even larger number are simply playing a wait-and-see game and finding ways to work around the law. There is still a significant grey area for NGO operations. We'll see how much and how fast that will change after the 19th Party Congress in October.

[i]The CPAFFC was founded in 1954 as a national
GONGO (government-organized NGO) specializing in foreign affairs. Over the
years, it has cooperated with numerous NGOs, participated in civil society
activities and acted as a catalyst for developing China’s relationship with the
world. Since its establishment, CPAFFC has formed friendly relationships with
over 500 non-governmental organizations from over 150 countries.]

Monday, May 8, 2017

Following up on my last blog post showing the most recent stats on
foreign NGOs that registered a representative office by month and province
(Table 1), I decided to also break them down by sector (Table 2) and by
country/territory of origin (Table 3) to see what the numbers would reveal. The
source was a list of registered foreign NGOs available on the Ministry of
Public Security's website.

Table 1: Number
of ONGOs that have registered a representative office by month and province

Jan

Feb

March

April

Total

Beijing

22

1

1

4

28

Guangdong

5

3

2

10

Shanghai

6

8

14

Sichuan

1

1

2

Yunnan

9

9

Jiangsu

3

3

Gansu

1

1

Guizhou

1

1

Jiangxi

1

1

Total

33

1

5

30

69

In total, 62 NGOs were listed as registering a total of 69 representative offices. Five of the 62 NGOs had succeeded in registering a
representative office in more than one province. These included:

MSI Professional Services,
a faith-based NGO doing poverty alleviation work (agriculture, community
health and development, business development, education and youth, etc.)
which had registered a rep office in Sichuan and Yunnan;

Project Hope, a NGO
which works on health care, had rep offices in Beijing and Shanghai

U.S. Soybean Export
Council which had rep offices in Beijing and Shanghai.

U.S.-China Business
Council which had rep offices in Beijing and Shanghai.

World Vision Hong
Kong, a NGO which works on community and youth development, poverty
alleviation and disaster relief, had rep offices in Guangdong, Yunnan,
Guangxi and Jiangxi.

For Table 2, I had to create broad categories
and settled on making a distinction between: 1) membership associations engaged
in commerce, trade and scientific/technical research; 2) development-type NGOs
providing social services (mostly health-related, child welfare, and poverty
alleviation, and environmental); and 3) NGOs engaged in education and cultural exchange. (Note: In an earlier version of this post, I used the term "social service" instead of "development" but an astute reader noted that environmental NGOs generally do not provide social services, but rather usually do advocacy. I'll use the term "development" for now until I can think of a better solution.)

Table
2: Number of ONGOs registered by sector/field

Development

Education/

Culture

Econ/

Trade

Sci/

Tech

Think-tank

Total

Beijing

18

2

7

1

28

Guangdong

3

2

5

10

Shanghai

2

11

1

14

Sichuan

2

2

Yunnan

9

9

Jiangsu

1

2

3

Gansu

1

1

Guizhou

1

1

Jiangxi

1

1

Total

37

5

25

1

1

69

The largest sectors were development with
37 NGOs, and economic/trade associations with 25. I also created a separate
category for think-tanks, in this case the Paulson Institute which was
registered in Beijing. The Paulson Institute is a U.S. think tank founded
by Henry Paulson, the former CEO of Goldman Sachs and former Treasury Secretary
under President George W. Bush.

Not surprisingly, most of the registered development NGOs were concentrated
in Beijing and Yunnan, a province which has a long history of involvement by
foreign NGOs mostly working in the environmental, health and poverty
alleviation sectors. Most of the economic and trade associations were
concentrated in the industrial/commercial centers of Beijing, Shanghai and Guangdong as we would expect.

In terms of country of origin (Table 3), the largest number came from the U.S.
with 25. Here again, this was no surprise given the size of the nonprofit
sector in the U.S. compared to other countries. What was more unexpected was
the number of Hong Kong-based NGOs (20) that had managed to register, nearly as
many as from the U.S., and far more than those from European countries. Many of
these were social service, or educational/cultural NGOs, rather than
economic/trade associations, contrary to what we might think given Hong Kong's
position as a commercial center. Several of these NGOs were established by
ethnic Chinese, faith-based, quite small and not well-known, in contrast with
the much larger, well-known NGOs such as the Gates Foundation, Save the
Children, Family Health International, Conservation International and World
Wildlife Fund from the U.S. and Europe. In fact, an internet search on a number
of them turned up almost no information about their mission, organization,
governance or activities. Many had also not been previously registered as a rep
office of a foreign foundation with the Ministry of Civil Affairs under the
2004 Foundation Management Regulations. The ability of these Hong Kong-based
NGOs to register a rep office quite early on suggests that capacity and
expertise may not count as much as an organization's cultural/ethnic affinity,
connections, and history working in the PRC, but that may also be pure
speculation on my part. Still their presence on the list does raise the question
of how these NGOs were able to get a head-start on many of their
better-resourced counterparts.